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S. Kumar and Another V/S Indian Bank

    MA-90 of 2001 (IA-81 of 2001 in O.A. 41 of 2001-DRT-II, Chennai)

    Decided On, 19 March 2002

    At, Debt Recovery Appellate Tribunal At Chennai

    By, THE HONORABLE JUSTICE: A. SUBBULAKSHMY. (CHAIRPERSON)

   




Judgment Text


1. The respondent Bank filed suit before the High Court and then transferred to City Civil Court, Chennai, in OS No. 10289/96 against the appellants/defendants for recovery of a sum of Rs. 6.90,837.32 p together with interest and costs and the defendants were set ex pane and the suit was decreed with costs as prayed for, on 8.10. 1 996 by the City Civil Court. Chennai. The petitioners did not file any petition for setting aside the ex pane decree. After the Recovery of Debts Due to Banks and Financial Institutions (RDDB&FI) Act (the Act) came into force, as the amount due from the defendants was more than Rs. 10 lakhs, the Bank filed OA before DRT, Chennai, for issue of Recovery Certificate. The Tribunal issued Recovery Certificate for a sum of Rs. 16,33,433/- together with future interest by order dated 7.12.2000 stating that no notice is required to be issued to the defendants under Section 31 (A). The defendants filed the IA to re-open the OA staling that the summons were received to appear before the Tribunal on 22.12.20

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0 but the defendants' Counsel was informed that the OA was already disposed of on 7.12.2000 and the defendants are having valid grounds to defend their case and hence the petition must be allowed to reopen the OA.2. The respondent Bank filed counter contending that no notice is required to be issued to the defendants under Section 31 (A) and since the amount exceeded Rs. 10 lakhs it is not necessary to file any final decree application before the Court which passed the preliminary decree and the petition is not maintainable and it is liable to be dismissed. The PO, DRT-II heard that petition and dismissed that petition. That order is challenged in this appeal.3. Counsel for the appellants submits that the decree passed by the City Civil Court, Chennai, was an ex parte decree and the City Civil Court passed preliminary decree and the applicant Bank did not file any application for passing final decree and no final decree has been passed and only in the year 2001 the Bank filed OA for issue of Recovery Certificate and as no final decree application was filed within three years from the date of passing of the preliminary decree the matter is also barred by limitation and the DRT has no power to issue Recovery Certificate on the time-barred application and hence he is entitled for reopening the OA. He relies upon the decision of the Madras High Court reported in I (2000) BC 73, State Bank of India v. Kasim Proprietor and Ors., and submitted that application for final decree after expiry of three months is not maintainable. He has also filed the decision of the Madras High Court in 1988-20 L.W., P. Subramania Pillai v. Vadivu Ammal, wherein also it has been held that petition for final decree cannot be filed after the period of limitation of three years.4. In the above said decisions the High Court has held that application for passing final decree after expiry of thee years cannot be maintained. The matter was pending in the City Civil Court. The Bank filed OA for issue of Recovery Certificate after the RDDB&FI Act came into force. The Act came into force on 24.6.1993. Decree was passed by the City Civil Court on 8.10.1996. After the passing of the RDDB&FI Act, all matters pending before the Civil Courts for the value of Rs. 10 lakhs and above are to be transferred to the DRTs as per Section 31 of the Act. The ex pane decree was passed by the City Civil Court on 8.10.1996 and the appellants did not take any steps to set aside the exparte decree in the Civil Court and that decree was transferred to the DRT under the provisions of the Act. Section 31A empowers the Tribunal to issue certificate of recovery in case of decree or order. Where a decree or order is passed by any Court before the commencement of the RDDB&FI (Amendment) Act, 2000 and has not yet been executed, then the decree holder may apply to the Tribunal to pass an Order for recovery of the amount and on receipt of that application under Section 31A(1), the Tribunal may issue a certificate for recovery to a Recovery Officer. On receipt of a certificate under Section 31A(2), the Recovery Officer shall proceed to recover the amount as if it was a certificate in respect of a debt recoverable under this Act. By virtue of the power conferred on the Tribunal under Section 31A, the Tribunal issued a Recovery Certificate on 7.12.2000. The Tribunal has also ordered issue of notice to the appellants directing the appellants to appear before the Tribunal on 22.12.2000 but passed the Order on 7.12.2000 itself issuing Recovery Certificate.5. Counsel for the appellants submits that after issuing summons to the appellants defendants directing them to appear on 22.12.2000 without waiting for the appearance of the defendants, prematurely on 7.12.2000 the Tribunal has passed the Order issuing Recovery Certificate and the Order passed by the Tribunal is erroneous and so it must be reopened. Section 31A of the Act does not contemplate any issuing of notice of the defendants before the issue of Recovery Certificate. Section 31A clearly states that when the decree holder applies to the Tribunal to pass an Order for recovery of the amount on receipt of that application the Tribunal may issue a certificate for recovery to Recovery Officer. So the PO, DRT, Chennai, thought it fit to pass the Order on 7.12.2000 itself without waiting till 21.12.2000 as no notice is contemplated under Section 31A. So it cannot be stated that the Tribunal passed the Order erroneously without waiting for the appearance of the defendants.6. The defendants/appellants without taking any steps to set aside the ex pane decree passed by the City Civil Court and also without filing any petition to set aside the ex pane decree before the DRT has come forward with this petition to reopen the case after the DRT has issued the Recovery Certificate.7. Without taking any steps to set aside the exparte decree passed by the City Civil Court after the Tribunal issued Recovery Certificate, the petitioners have come forward with this petition and this petition is not at all maintainable as the DRT has rightly passed the Order issuing Recovery Certificate under Section 31A. As I have already stated, for passing Order under Section 31A there is no need to issue any summons to the defendant. So even though the Tribunal has ordered issue of notice for appearance of the defendants on 22.12.2000 and the Tribunal passing the Order prior to that on 7.12.2000 issuing Recovery Certificate, cannot be said to be an erroneous Order and the Order is not a nullity. So the petition filed by the petitioners to reopen the case is not at all maintainable since the Order has been validly passed under Section 31A.8. Counsel for the appellants also further submitted that on the preliminary decree passed, the property cannot be brought for attachment and hence cannot be brought for sale and the remedy of the decree holder is to apply only for passing final decree. He relies upon the decision of the High Court in 50 C.W.N. Page 486, Jivandas Khimji v. Dindoyal Shah, wherein it has been held that in "A preliminary decree is a mortgage suit is not a decree for payment of money and such a decree, in default of payment by the judgment-debtor, as directed thereunder, cannot be executed by the attachment and sale of the properties of the judgment-debtor. The sole remedy of the decree-holder in such circumstances is to apply for a final decree under Order 34, Rule 6 of the Civil Procedure Code." Of course, in the case of mortgage decree there is no finality until the passing of the final decree but the case on hand stands on a different footing. Ex parte decree was passed by the City Civil Court and the Bank filed OA before DRT, Chennai, for issue of Recovery Certificate under the provisions of the RDDB&FI Act. As the decree has been passed and as OA filed before DRT for issue of Recovery Certificate, the question of passing the final decree does not arise and the DRT is empowered to issue a Recovery Certificate under Section 31A of the Act. Exercising such power the DRT has issued Recovery Certificate which, as I have already stated, is legally enforceable and there is no error in passing such Order.9. Counsel for the appellants further submitted that the PO, DRT can also withdraw the Recovery Certificate. For that he relies upon the decision in I (1999) BC Page 317 of the DRAT, Mumbai, wherein the DRAT has filed that "Presiding Officer under Section 26 of the Act has no doubt the powers to withdraw the certificate issued by him. The powers in my opinion are limited. They do not enlarge the scope of review as if the fresh suit or appeal is being decided. If the Order (Decree) passed by the Presiding Officer is set aside in appeal, withdrawal is contemplated. Secondly, in case of settlement or adjustment inter se the parties after the decree is passed, certificate can be withdrawn. In no other eventuality, Presiding Officer can withdraw his own certificate which has the effect of finality of determination of 'debt'."10. The above said decision states that if the Order passed by the PO, DRT is set aside in the appeal and in case of settlement or adjustment inter se between the parties the certificate can be withdrawn. It is also stated therein that after issue of certificate, the Presiding Officer becomes/functus officio to probe into the legality or validity and the question of nullity or the jurisdiction of the Civil Court which passes the decree cannot be gone into by the PO. I am entirely in agreement with the view taken by the DRAT in I (1999) BC 317 and I am also of the view that after issue of certificate the PO becomes functus officio to probe further in the matter.11. The appellants never filed any petition to set aside the exparte decree passed by the City Civil Court and now after Recovery Certificate was issued by the Tribunal based upon the decree passed by the City Civil Court the petitioners have come forward with this petition to reopen the case. The Tribunal has rightly passed the order under Section 31A of the Act. The petition filed by the petitioners to re-open the case is not at all maintainable. The PO, DRT-II, Chennai, has rightly dismissed that petition. I find no error in the Order passed by the PO, DRT-II, Chennai.12. Appeal dismissed.
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